Comcast and Charter Will Not be Leaders in U.S. Mobile Without Acquisitions

Some idea of potential cable TV provider mobile market share can be estimated by looking at cable’s current share of internet access accounts (a proxy for landline accounts), assuming the strategy stays as it is for the moment (selling only to existing or potential landline customers) and comparing those numbers with total mobile accounts in service.

Comcast and Charter, the two largest cable TV companies, have about 52 million internet access accounts, and represent about 81 percent of all U.S. cable customers. Total U.S. mobile accounts stand in excess of 440 million accounts.

In principle, were Charter and Comcast able to sell mobile service to half of their total landline accounts, they would garner 26 million accounts (making the two firm share roughly half of what Sprint holds right now). That would represent mobile account share of about six percent.

For the sake of argument, assume Charter and Comcast eventually are able to sell mobile service to 75 percent of their accounts. That would represent 39 million accounts, or about nine percent mobile account share, assuming U.S. accounts do not grow.

Most believe mobile accounts will keep growing, on the strength of internet of things connections, so the shares could change when IoT mobile connections become the largest percentage of accounts in service. Revenue is another matter, though. IoT accounts will garner recurring revenue that is a fraction of what a smartphone represents.

The bottom line is that, so long as cable is content to sell mobility services only to its own customers, mobile market share will be quite limited, probably in the six percent range for the foreseeable future.

That is one reason why some believe the ultimate outcome is acquisition of both T-Mobile and Sprint. That is the only way Charter and Comcast are likely to emerge as among the leaders of the mobile segment of the market.

For the moment, cable seems content to view mobile as a revenue-generating and profit-generating means of protecting the landline customer base, though.